Trusteeship Flashcards
Boardman v Phipps
court has inherent jurisdiction to award remuneration
Keech v Sandford
husband was legal owner of lease, husband and wife were beneficial owners under a trust for sale, husband used his legal title to buy out the freehold reversion and sold the property, constructive trust arose where W was entitled to a share of the proceeds from sale, when H purchased the reversion, he held half the fee simple interest for her benefit
Re Macadam
no defence to making a profit through trustees position unless he made the profits ‘with the knowledge and asset of the other persons’
Holder v Holder
son appointed executor of will but renounced position, purchased estate, later another son sought to have it set aside on the basis of the self-dealing rule, held son never assumed executory role and made it clear at all times he intended to purchase thr property
Tito v Waddel
purchase by T of the beneficial interest of any of the trustees is not voidable but can be set aside unless T can show he hasn’t taken advantage of his position, he made a full disclosure to B, the transaction was fair and honest
Re Brogden
failing to institute & prosecute legal proceedings to recover debt owed to the trust may constitute a breach of duty to safeguard assets of the trust, however there is no such breach if T believed that such a proceeding would fail
Keane (duty to invest)
it is T’s duty to ensure that the trust property is invested in the manner which will prove most advantageous to all the beneficiaries
Re Harari Settlement Trusts
in exercising ordinary prudence in making investments, T is to invest in any investment which he honestly thinks is desirable
Barett v Barclay’s Bank
trustees made 2 unauthorised investments one of which made a profit, court allowed the profit of one to cover the loss of the other as they were in the same course of wrongful conduct - highlighted there must be a very close connection for this to occur
Knott v Cottee
trust funds were to be used for stocks and bonds however T used them for foreign investments, T held liable for losses which resulted
Biehler
even if T does not stray outside the ambit of authorised investments, he must observe certain standards when carrying out duties
Learoyd v Whitely
T must take the care an ordinary prudent man of business would take if he were making investments for the benefit of those for whom he felt morally bound to provide
Bartlett v Barclays Bank
Brightman J held a T must conduct business as an ordinary man would his own affairs, this does not mean T is bound to avoid all risk , the court won’t fix liability on T who has committed no more than an error of judgement which no businessman can expect to be immune - emphasised a higher duty of care is expected in cases with professional T
Nestle v National Westminster
trust fund gave D bank (T) wide powers to invest, B, when she became entitled to the trust claimed it should have been worth more but was not due to T’s failure to invest, held the essence of the banks duty was to act as an ordinary prudent man would his own affairs, unless it failed to do so, it was not in breach of the trust, emphasised the point that T will not automatically incur liability due to a mere error of judgement
Keane
notes it is remarkable that professional T who have breached their duties escape liability despite there being expert evidence that the investments failed to maintain their value in real terms
Stacey v Branch
P argued that D(T) breached his duty by leaving the trust property in care of caretaker rather than renting it out despite being given ‘full power to deal with the property in his absolute discretion as he shall think fit”, argument was rejected, found T acted bona fide, held duty of T is to act honestly, use as much diligence as a reasonably cautious man and avoid any investments that are attended with hazard
Keogan, Mee & Wylie
criticised S v B as unduly generous to T
Re Hastings - Bass
T’s exercise of discretionary powers may be set aside where it is clear that he would not have acted as he did a) had he not taken into account considerations which he should not have taken into account, or b) had he not failed to take in account consideration which he ought to have taken into account
Pitt v Holt
Lloyd LJ restated the rule that T’s duty to take relevant matters into account is a fiduciary duty, so an act done as a result of a breach of that duty is voidable
Abacus Trust v Barr
the principle does not require that T’s mistake is fundamental, all that is required is that the unconsidered relevant consideration would or might have affected T’s decision
Sieff v Fox
held court could set aside an exercise of T discretion where the effect was different from that intended and T would not have acted as they did if they had not failed to take account of relevant circs or took account of irrelevant circs
Lord Neuberger
extra-judicial comment, the rule was a get out of jail free card for T’s who had erred
Boliden v Tara Mines
Finlay Geoghegan J held it unnecessary to choose between but preferred the ‘would’ formula
Pitt v Holt
Eng SC restricted the principle to apply where there has been a breach of trust/fiduciary duty only
